VersaBank Announces Preferred Share Offering

June 12, 2017 08:30 AM Eastern Daylight Time

LONDON, Ontario--(BUSINESS WIRE)--VersaBank (the "Bank") (TSX:VB) is pleased to announce that it obtained
a receipt from the securities regulatory authorities in each of the
provinces of Canada for a preliminary short form prospectus relating to
an offering of up to $30,000,000 of non-cumulative 5-year rate reset
preferred shares, series 5 (the "Series 5 Preferred Shares") at a price
of $10.00 per share (the "Offering").

Net proceeds of the Offering are expected to qualify as Tier 1 capital
of the Bank and approximately $10,000,000 will be used for the repayment
of certain subordinated indebtedness, subject to regulatory approval,
with the balance being used for general corporate purposes.

The syndicate of agents for this Offering is being led by RBC Dominion
Securities Inc. and includes BMO Capital Markets, Industrial Alliance
Securities Inc., GMP Securities L.P., Raymond James Ltd. and PI
Financial Corp. The Bank has granted the Agents an option, exercisable
in whole or in part, to sell, as agents, such number of Series 5
Preferred Shares equal to 15% of the number of Series 5 Preferred Shares
sold pursuant to the Offering on the same terms, to cover
over-allotments, if any, and for market stabilization purposes,
exercisable at any time within 30 days of closing.

Subject to regulatory approval, the Bank has the right to redeem up to
all of the then outstanding Series 5 Preferred Shares on July 31, 2022,
and on July 31 every five years thereafter at a price of $10.00 per
share.

The Offering is scheduled to close on or about June 29, 2017 and is
subject to certain conditions including, but not limited to, the receipt
of all necessary approvals including the approval of the Toronto Stock
Exchange and other applicable securities regulatory authorities.

About VersaBank

VersaBank, a technology based and digital Canadian Schedule I chartered
bank, operates using an "electronic branchless model". It obtains
deposits, along with consumer and commercial loan and lease receivables,
electronically. The Bank also makes residential development and
commercial mortgages it obtains through a well-established network of
brokers and through direct contact with its lending staff. VersaBank’s
Common Shares trade on the Toronto Stock Exchange under the symbol VB
and its Series 1 Preferred Shares and Series 3 Preferred Shares trade
under the symbols VB.PR.A and VB.PR.B, respectively. The securities
described above have not been registered under the United States
Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent registration or an applicable exemption from
the registration requirements. This press release does not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be
any sale of the securities in any state in which such offer,
solicitation or sale would be unlawful.

Not for distribution to U.S. news wire services or dissemination in the
U.S.

A preliminary short form prospectus containing important information
relating to these securities has been filed with securities commissions
or similar authorities in each of the provinces of Canada. The
preliminary short form prospectus is still subject to completion or
amendment. Copies of the preliminary short form prospectus may be
obtained from one of the dealers noted above. There will not be any sale
or any acceptance of an offer to buy the securities until a receipt for
the final prospectus has been issued.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain 'forward-looking' statements regarding
the plans, intentions, beliefs and current expectations of the Bank, its
directors, or its officers with respect to the future business
activities and operating performance of the Bank. The words "may",
"would", "could", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect" and similar expressions, as they relate to the
Bank, or its management, are intended to identify such forward-looking
statements. Specific forward-looking statements in this press release
include statements regarding the expected closing date of the Offering
and the anticipated amount and use of the proceeds from the Offering.
Investors are cautioned that any such forward-looking statements are not
guarantees of the future business activities or performance and involve
risks and uncertainties, and that the Bank's future business activities
may differ materially from those in the forward-looking statements as a
result of various factors. Such risks, uncertainties and factors are
described in the periodic filings with the Canadian securities
regulatory authorities, including the Bank's Annual Information Form and
quarterly and annual Management Discussion & Analysis, which may be
viewed on SEDAR at www.sedar.com.
Should one or more of these risks or uncertainties materialize, or
should assumptions underlying the forward-looking statements prove
incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or
expected. The closing of the Offering could be delayed if the Bank is
not able to obtain the necessary regulatory approvals on the timelines
planned. The Offering will not be completed at all if these approvals
are not obtained or some other condition to the closing is not
satisfied. Accordingly, there is a risk that the Offering will not be
completed within the anticipated time, or at all. Further, the intended
use of the net proceeds of the Offering might change if the board of
directors determines that it would be in the best interests of the Bank
to deploy the proceeds for some other purpose. Although the Bank has
attempted to identify important risks, uncertainties and factors which
could cause actual results to differ materially, there may be others
that cause results not anticipated, estimated or intended. The Bank does
not intend, and does not assume any obligation, to update these
forward-looking statements.